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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of ) File No. EB-04-IH-0525
Blackstone Calling Card, Inc. ) NAL/Acct. No. 200632080091
Apparent Liability for Forfeiture ) FRN 0014434062
)
)
MEMORANDUM OPINION AND ORDER
Adopted: July 13, 2007 Released: July 13, 2007
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Memorandum Opinion and Order ("Order"), based on information
that Blackstone Calling Card, Inc. ("Blackstone") submitted to the
Enforcement Bureau ( "Bureau") in response to a December 19, 2005
Notice of Apparent Liability for Forfeiture ("NAL"), we find that
Blackstone is not a regulated telecommunications carrier. As a result,
we cancel the $20,000 forfeiture proposed in the NAL.
II. BACKGROUND
2. Blackstone is a Florida-based company that offers various services and
products to the public, among them a variety of prepaid calling cards,
including cards with the Blackstone label. On March 30, 2004, Bureau
staff sent a letter to Blackstone requesting specific information
relating to its compliance with Section 64.1195 of the Commission's
rules. Section 64.1195(a) requires that a telecommunications carrier
that will provide or already provides interstate telecommunications
service file certain registration information with the Universal
Service Administrative Company ("USAC"). Blackstone responded to the
Bureau's inquiry letter by providing an unsupported statement that
"Blackstone Calling Card, Inc. is not a carrier" and thus not required
to comply with Section 64.1195. In response to a Bureau Letter of
Inquiry ("LOI") , Blackstone failed to provide sufficient information
to support this claim.
3. On December 19, 2005, the Bureau issued an NAL against Blackstone
finding that Blackstone had apparently violated Commission orders by
willfully and repeatedly failing to respond to Bureau directives to
provide information and documents. Based on the Bureau's review of the
limited information provided by Blackstone and other information
available from public sources, the Bureau concluded in the NAL that
Blackstone appeared to be a carrier and was apparently liable for a
forfeiture. The NAL ordered Blackstone to file complete responses to
the Bureau inquiries and, pursuant to section 503(b)(2)(B) of the
Communications Act of 1934, as amended, (the "Act"), to pay the
$20,000 proposed forfeiture or file a response within thirty days.
After receiving the NAL, Blackstone provided information and documents
demonstrating it was not a regulated entity providing
telecommunications services at the time of the apparent violation.
III. DISCUSSION
4. We first conclude that Blackstone was not a regulated entity providing
telecommunications services at the time of the apparent violation.
During the Bureau's investigation Blackstone failed to provide any
supporting documentation for its claim that it was not a
telecommunications provider, preventing the Bureau from making a
timely determination about Blackstone's status. After reviewing the
materials provided, we are now in a position to evaluate fully
Blackstone's claim that it was not a regulated entity. Among other
information, Blackstone submitted copies of contracts between it and
the telecommunications carriers providing the service underlying
Blackstone's calling cards. These contracts establish that Blackstone
was acting as an agent for the carriers by distributing the prepaid
calling cards and, among other terms, acknowledged that the carriers
-- not Blackstone -- were responsible for the provision of the
associated services and the related regulatory obligations. After
reviewing the documents and other probative information submitted by
Blackstone, we are now able to determine by a preponderance of the
evidence that Blackstone was not a regulated telecommunications
provider at the time of the apparent violations and thus not obligated
to comply with section 64.1195(a) of the Commission's rules.
5. Having determined that Blackstone was not a regulated
telecommunications provider at the time of the apparent violations, we
find that we were precluded from proceeding with a Notice of Apparent
Liability without first issuing a citation in accordance with the
requirements in section 503(b)(5) of the Act. Under section 503(b)(1)
of the Act, any person who is determined by the Commission to have
willfully or repeatedly failed to comply with any provision of the Act
or any order, rule, or regulation issued by the Commission shall be
liable to the United States for a forfeiture penalty. The Commission,
however, must first issue a citation in the event a person does not or
need not hold a Commission authorization at the time of the apparent
violation. The Commission may impose a forfeiture only if the
non-regulated company is issued a citation and "subsequently engages
in the conduct of the type described in such citation." Since we were
precluded from proceeding with a Notice of Apparent Liability against
Blackstone without first issuing a citation in accordance with the
requirements in section 503(b)(5), we cancel the NAL. Given the
particular facts and circumstances of this case, we exercise our
discretion by declining to issue a citation against Blackstone under
section 503(b)(5).
IV. ORDERING CLAUSES
6. ACCORDINGLY, IT IS ORDERED THAT, pursuant to sections 4(i), 4(j), and
503(b) of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
154(i), 154(j), 503(b), the Notice of Apparent Liability for
Forfeiture issued against Blackstone Calling Card, Inc. on December
19, 2005 is hereby CANCELED.
7. IT IS FURTHER ORDERED THAT a copy of this MEMORANDUM OPINION AND ORDER
shall be sent, by certified mail/return receipt requested to Steven A.
Augustino Esq., Kelley, Drye & Warren, LLP, Washington Harbour, Suite
400, 3050 K Street, N.W., Washington, D.C. 20007-5108.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
See www.blackstoneonline.com.
See letter from Hugh Boyle, Chief Auditor, Investigations and Hearings
Division, Enforcement Bureau, to Blackstone dated March 30, 2004 ("March
30 Audit Letter").
See 47 C.F.R. S: 64.1195(a). In 1999, to streamline the administration of
the programs and to ease the burden on regulatees, the Commission
consolidated the information filing requirements for multiple
telecommunications regulatory programs into the annual Telecommunications
Reporting Worksheet. See 1998 Biennial Regulatory Review, Report and
Order, 14 FCC Rcd 16602 (1999). The next year the Commission revised the
Telecommunications Reporting Worksheet slightly to collect the additional
information necessary to achieve its goal of establishing a central
repository for interstate telecommunications providers by the least
provider-burdensome method. Carrier Selection Order, 15 FCC Rcd at 16026.
Carriers required to register must submit a FCC Form 499-A to USAC. This
requirement to register is essential to the fulfillment of the universal
service and other program missions because it identifies the company as
potentially subject to various program requirements and enables the
program administrators to oversee the company's compliance with those
requirements. Upon submission of a FCC Form 499-A registration, the
carrier is issued a filer identification number by USAC, which is then
associated with further filings by the company and is used to track the
carrier's contributions and invoices.
Electronic mail message from Tania Diblin, Legal Assistant, Blackstone,
dated April 16, 2004.
See Letter from Luis Arias, Blackstone, to Carla Conover, Investigations
and Hearings Division, Enforcement Bureau, dated December 20, 2004.
See 47 U.S.C. S: 503(b)(2)(B); Blackstone Calling Card, Inc. Notice of
Apparent Liability for Forfeiture and Order, 20 FCC Rcd 19898 (Enf. Bur.
2005).
See Response of Blackstone Calling Card, Inc. dated April 20, 2006
("Response"), at 2.
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1); see also 47 U.S.C. S:
503(b)(1)(D) (forfeitures for violation of 14 U.S.C. S: 1464).
47 U.S.C. S: 503(b)(5). After a citation has issued, no additional
citation with respect to the conduct of the type detailed in the citation
is necessary before notice and penalty proceedings may ensue. Id.
Id.
(Continued from previous page)
(continued....)
Federal Communications Commission DA 07- 3235
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Federal Communications Commission DA 07- 3235